Insurers, Hospitals Disagree About Proposed Network Rules

Rich Daly, HFMA Senior Writer/Editor

Provider-related policies that have drawn hospital concerns include those that would reduce the required number of essential community providers in networks.

March 13—Proposed federal changes to network adequacy requirements for plans sold in government-run marketplaces drew cheers from insurers and deep concerns from hospitals in recent weeks.

More than 4,000 comments were submitted regarding the Centers for Medicare & Medicaid Services’ (CMS’s)
proposed rule changes to the marketplaces established by the Affordable Care Act (ACA). Among the rule changes were new enrollment limits, network adequacy standards, and timelines for qualified health plan certification.

Insurers and their advocates strongly backed the changes as needed to stabilize the marketplaces, which provide coverage for 11 million enrollees. The average premium increase for 2017 was 25 percent, and few insurers have avoided steep losses.

Among the provider-related provisions drawing insurer support: Beginning in 2018, CMS would rely on state reviews of network adequacy in states with at least a “reasonable access standard,” even in states with a federally operated marketplace. In states that do not meet the standard, CMS
would rely on insurers’ commercial or Medicaid accreditation.

“Federal time and distance standards are outdated and do not accurately reflect how care is delivered today (e.g., telehealth, centers of excellence) or account for key elements of access to care, such as plans’ efforts to ensure networks are comprised of high-quality providers through the
use of tiered networks or high-value plans,” Marilyn Tavenner, president and CEO of America’s Health Insurance Plans, wrote to CMS.

Hospital Concerns

Some hospitals and hospital advocates, such as the Federation of American Hospitals (FAH), countered that they were alarmed by the decision to move network adequacy decisions back to the states.

“The FAH supports the existing federal floor against which network adequacy can be assessed,” Charles Kahn, president and CEO of FAH, wrote to CMS. “Consumers need to be assured of meaningful access to healthcare, and access to a broad range of hospitals and primary and specialty care
physicians helps ensure such meaningful access to care.”

But other hospital advocates supported the change.

“We agree with the agency’s proposal to rely on states to manage network adequacy to the extent they are able, and we encourage CMS to provide specific direction to states about what are acceptable standards,” Thomas Nickels, executive vice president of the American Hospital Association
(AHA), wrote in a
letter to CMS.

The increasing move to narrow networks could adversely affect providers in several ways, including by leaving them to deal with patients who did not realize their provider was outside the network. Balance bills have become an increasingly high-profile issue in recent years, and looser network
adequacy requirements could exacerbate the problem, some providers say.

“This proposal seems to compound the growing problem insurance companies have created and continue through their narrowing and tiering of insurance products,” Jeffrey S. Plagenhoef, MD, president of the American Society of Anesthesiologists, wrote to CMS.

Chris Sloan, a senior manager at Avalere, said that despite such concerns, the policy change was likely to have “relatively little impact” because many states already have their own requirements and the federal government was not aggressively enforcing its requirements.

“In states that don’t have network adequacy protections or protections which weren’t as stringent as the fed’s, this could have a limited impact on network inclusion and access,” Sloan said in an interview.

He noted that ACA marketplaces “have been narrowing pretty aggressively over the last four years” as preferred provider organizations
all but
disappeared and health maintenance organizations proliferated.

“It’s because in this market they are attempting to manage costs, and one of the ways to manage costs is to essentially steer patients to a high-value network or specific providers,” Sloan said.

Essential Providers

Provider-related policies that drew concerns from the AHA involved a loosening of plan requirements regarding essential community providers (ECPs), a designation for providers that serve predominantly low-income, medically underserved individuals.

CMS proposed to revert to an ECP standard it used in 2014, which would reduce the share of ECPs that insurers are required to include in a network’s service area from 30 percent to 20 percent.

“We encourage the agency not to finalize a uniform reduction in the ECP contracting and instead continue to allow for integrated delivery systems to meet an alternate ECP standard,” Nickels wrote.

“We support this change and would like the department to also reconsider the recruitment requirement of essential community providers imposed on issuers,” David Schwartz, head of global policy for Cigna, wrote to CMS. “We do not believe requiring issuers to recruit one essential community
provider in every available essential community provider category for every county each year is necessary.”

The ECP changes drew particular concern from specialized hospitals, such as academic medical centers, which are often eliminated from networks because they provide more services and carry greater cost.

Qualified health plan issuers “have been allowed to exclude these institutions from their networks, putting pressure on patients to sever ties with providers with whom they have established doctor-patient relationships or incur financially burdensome cost sharing in order to maintain
continuity of care,” Janis Orlowski, MD, chief healthcare officer for the Association of American Medical Colleges, wrote to CMS.

Others, including state insurance regulators, opposed the ECP changes because they could impact marketplace enrollees who frequently churn between that coverage and Medicaid.

“ECPs who see Medicaid patients and contract with marketplace plans help ensure continuity of care for patients whose changing income impacts their Medicaid eligibility,” wrote Dave Jones, California’s insurance commissioner, referring to ECPs such as community health centers,
public health departments, public hospitals, community mental health clinics, and other safety-net providers.

Provider-related policies that have drawn hospital concerns include those that would reduce the required number of essential community providers in networks.

March 13—Proposed federal changes to network adequacy requirements for plans sold in government-run marketplaces drew cheers from insurers and deep concerns from hospitals in recent weeks.

More than 4,000 comments were submitted regarding the Centers for Medicare & Medicaid Services’ (CMS’s)
proposed rule changes to the marketplaces established by the Affordable Care Act (ACA). Among the rule changes were new enrollment limits, network adequacy standards, and timelines for qualified health plan certification.

Insurers and their advocates strongly backed the changes as needed to stabilize the marketplaces, which provide coverage for 11 million enrollees. The average premium increase for 2017 was 25 percent, and few insurers have avoided steep losses.

Among the provider-related provisions drawing insurer support: Beginning in 2018, CMS would rely on state reviews of network adequacy in states with at least a “reasonable access standard,” even in states with a federally operated marketplace. In states that do not meet the standard, CMS
would rely on insurers’ commercial or Medicaid accreditation.

“Federal time and distance standards are outdated and do not accurately reflect how care is delivered today (e.g., telehealth, centers of excellence) or account for key elements of access to care, such as plans’ efforts to ensure networks are comprised of high-quality providers through the
use of tiered networks or high-value plans,” Marilyn Tavenner, president and CEO of America’s Health Insurance Plans, wrote to CMS.

Hospital Concerns

Some hospitals and hospital advocates, such as the Federation of American Hospitals (FAH), countered that they were alarmed by the decision to move network adequacy decisions back to the states.

“The FAH supports the existing federal floor against which network adequacy can be assessed,” Charles Kahn, president and CEO of FAH, wrote to CMS. “Consumers need to be assured of meaningful access to healthcare, and access to a broad range of hospitals and primary and specialty care
physicians helps ensure such meaningful access to care.”

But other hospital advocates supported the change.

“We agree with the agency’s proposal to rely on states to manage network adequacy to the extent they are able, and we encourage CMS to provide specific direction to states about what are acceptable standards,” Thomas Nickels, executive vice president of the American Hospital Association
(AHA), wrote in a
letter to CMS.

The increasing move to narrow networks could adversely affect providers in several ways, including by leaving them to deal with patients who did not realize their provider was outside the network. Balance bills have become an increasingly high-profile issue in recent years, and looser network
adequacy requirements could exacerbate the problem, some providers say.

“This proposal seems to compound the growing problem insurance companies have created and continue through their narrowing and tiering of insurance products,” Jeffrey S. Plagenhoef, MD, president of the American Society of Anesthesiologists, wrote to CMS.

Chris Sloan, a senior manager at Avalere, said that despite such concerns, the policy change was likely to have “relatively little impact” because many states already have their own requirements and the federal government was not aggressively enforcing its requirements.

“In states that don’t have network adequacy protections or protections which weren’t as stringent as the fed’s, this could have a limited impact on network inclusion and access,” Sloan said in an interview.

He noted that ACA marketplaces “have been narrowing pretty aggressively over the last four years” as preferred provider organizations
all but
disappeared and health maintenance organizations proliferated.

“It’s because in this market they are attempting to manage costs, and one of the ways to manage costs is to essentially steer patients to a high-value network or specific providers,” Sloan said.

Essential Providers

Provider-related policies that drew concerns from the AHA involved a loosening of plan requirements regarding essential community providers (ECPs), a designation for providers that serve predominantly low-income, medically underserved individuals.

CMS proposed to revert to an ECP standard it used in 2014, which would reduce the share of ECPs that insurers are required to include in a network’s service area from 30 percent to 20 percent.

“We encourage the agency not to finalize a uniform reduction in the ECP contracting and instead continue to allow for integrated delivery systems to meet an alternate ECP standard,” Nickels wrote.

“We support this change and would like the department to also reconsider the recruitment requirement of essential community providers imposed on issuers,” David Schwartz, head of global policy for Cigna, wrote to CMS. “We do not believe requiring issuers to recruit one essential community
provider in every available essential community provider category for every county each year is necessary.”

The ECP changes drew particular concern from specialized hospitals, such as academic medical centers, which are often eliminated from networks because they provide more services and carry greater cost.

Qualified health plan issuers “have been allowed to exclude these institutions from their networks, putting pressure on patients to sever ties with providers with whom they have established doctor-patient relationships or incur financially burdensome cost sharing in order to maintain
continuity of care,” Janis Orlowski, MD, chief healthcare officer for the Association of American Medical Colleges, wrote to CMS.

Others, including state insurance regulators, opposed the ECP changes because they could impact marketplace enrollees who frequently churn between that coverage and Medicaid.

“ECPs who see Medicaid patients and contract with marketplace plans help ensure continuity of care for patients whose changing income impacts their Medicaid eligibility,” wrote Dave Jones, California’s insurance commissioner, referring to ECPs such as community health centers,
public health departments, public hospitals, community mental health clinics, and other safety-net providers.

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